Are you wondering: Should I work on Wall Street? I worked on Wall Street at Goldman Sachs and Credit Suisse (RIP) for 13 years. It was a good career that enabled me to retire early, build investment wealth, and grow Financial Samurai.
Therefore, in summary, I recommend working on Wall Street if you are given a job offer. You can make a lot more money on Wall Street than in most other industries.
After you make a lot of money, you can then do something else that provides more meaning to you.
Working In Finance Is Hard
In my post, “Suck It Up Already! Suffering Is A Rite Of Passage,” I discussed how going to the media to rat out your company is a dishonorable thing to do. If I was a manager, I'd never hire someone who couldn't resolve his/her differences in private.What I didn't expect was for a readerto comment that I had done the same!
See Virginia's comment below,
“I kind of feel like you ratted out your company because you are constantly saying how awful it was working on Wall Street.”
Before this comment, I never believed I ratted out the companies I worked for. Discussing an industry is much different from bagging on a specific company.
I shared stories about how it was tough work coming in at 5:30am and leaving after 7:30pm almost every day in NYC. The pressure to perform was immense. But not once have I ever spoken poorly about either of my two employers. How could I, when they took a chance on me for 13 years?
Yes, working on Wall Street is an ass-kicking, but there's a lot of good as well.To dispel any perception that I didn't appreciate my time there,I'm going to talk about the benefits of working in finance. I realize it's much more popular to crap on Wall Street. But it's good to see the other side.
Benefits Of Working On Wall Street (Finance)
When I say Wall Street, I mean investment banking, corporate finance, sales and trading, and wealth management. I'm not talking about working at a commercial bank or working in an operations, tech, or HR role at a Wall Street firm.
Here are the benefits of working on Wall Street.
1. You get to make a solid income.
Let's address the elephant in the room first. Today, analysts right out of collegecan make a base salary of $110,000 – $150,000 as of 2024. Then there is a first-year bonus of usually between $50,000 – $100,000 in a good year when joining a major firm.
When I left in 2012, a Director level salary was $250,000 on average, and a Managing Director salary was $400,000 – $450,000. That's a lot of money, especially since bonuses can easily equal 1-2X your salary in a normal year.
The Importance Of Attending A Top School To Get Into Finance
If you want to work on Wall Street, you will likely have to go to a top university. Wall Street tends to focus its hiring from the top 25 schools.
Below is Harvard's post-graduate employment by industry for 2022. Notice how most go into management consulting, finance, and tech. The median income of Ivy League graduates is much higher because most work in these industries.
2. You learn how to work under pressure.
Whether it's working a large order for a tier 1 institutional client, trying to rank in the top three in their latest broker vote, or getting a request to go back into the office at 11:30pm to finish a pitch, working on Wall Street toughens you up so that anything you do afterward becomes easily manageable.
You begin to thrive under pressure,making you a valuable asset if you want to join a startup, a sports team, or any organization where production or death is the requirement.
3. You build a tremendous amount of endurance and tenacity.
Wall Street is famous for working their analysts and associates 80 – 100 hours a week. After a couple years of working such longhours, you start building an endurance. Many people give up way to0 early before the good stuff begins to happen.
They can't take the rejections, the pressure, the late nights, and the early mornings. Once you regularly work 12+ hour days, you'll be able to produce so much more than your competitors in many other industries.
Most of all, you develop grit. With grit, it's hard to fail because you keep on trying.
4. You deepen your knowledge.
In order to be good at your job on the front lines, you've got to be knowledgeable about economics, politics, companies, and investing.You've got to know your stuffif you want to add value for clients. Otherwise, they'll just do a deal with the next gung ho person at another firm.
Because there's always something new to learn, there's always a new challenge. When you're constantly feeling challenged, you're motivated to do much more. There was something new to learn every day I came into the office.
With my knowledge from working on Wall Street for 13 years, I wrote an instant Wall Street Journal bestseller called, Buy This Not That. It's the best personal finance book you'll ever read.
5. You'll become a better communicator.
It's eat what you kill after getting past the first several years as a financial analyst. If you produce nothing, you won't get paid, nor will you get promoted. You'll probably lose your job if you're not a consistent producer.
Wall Street forces you to interact with intense people who are often very smart. By being a better communicator, you'll meet more people, develop more friendships, and stand up for yourself better during any negotiation process.
My experience on Wall Street has made me a better podcast host on The Financial Samurai podcast. I ask tough questions, analyze topics more clearly, and deliver more confident prose.
6. You gain access to privateinvestments.
When I was working at Goldman, there was always some type of investment employees could invest in alongside institutional investors. Unless you had millions of dollars, you probably wouldn't get the opportunity.
For example,I was able to invest in the Andor hedge fund that actually went up a lot during the dotcom bubble given they were net short. It saved my retirement portfolioat the time.
In addition, I've invested in private funds that have invested in unicorns like Ripple and Sigma. These investments are unavailable to the vast majority of investors.
7. You might become a better investor.
When all you do every day is think about how to make your clients money through investments, it's likely you will also become a better investor with your own money.
Because I've been trained to look for specific things in each company or offering, I may often see investments much differently from my friends who haven't worked in finance.
As a result, while others may let their savings sit in a money market account, I'm more confident deploying my capital. Over time, the capital may grow much greater than the average non-finance person.
8.You appreciate life more once you leave.
The public dislikes Wall Street just like it hates members of Congress. You can have absolutely nothing to do with the latest crisis, yet you are still blamed for all the latest economic woes. People will mistake you for the CEOs and top lieutenants who make the mega millions. It can be very demoralizing.
Having experienced hatred, you appreciate life after Wall Street much more when people just treat you like a normal person.
9. You gain a lot of optionality.
Making lots of money is nice, but gaining the optionality to do more things is even better. If you are able to avoid the temptation of spending like a crazy person, after just 10 years of work, you're probably a millionaire.
Once you have meaningful savings, you can explore new occupations, spend more time with family, or launch your own initiative. You might even be able to start a personal finance blog that gains a modest following!
10. You learn how to be independent.
Because you're so used to eating what you kill, you no longer rely on anybody to survive. Independenceallows other people to live their lives the way they want without having you be their responsibility.
11. You can provide a comfortablelife for your family.
Assuming you finally leave, or have enough time to spend with your family, the money you make can be used to secure your family's financial future – maybe even multi-generational financial security. The one thing about having money is not stressing as much about money.
Being able to take care of your parents and help provide them a better life is priceless. Being able to donate both your time and money to helping other people is also very rewarding.
What Are The Negatives Of Working On Wall Street?
If you want to know about the cons of working on Wall Street, that's easy. People who don't know better will automatically think you're a thief thanks to movies like The Wolf of Wall Street and Boiler Room. You have to explain to them that such firms are bucket shops where no decent person goes to work.
But they will still lump everybody together because it's easier to find an enemy than a friend. You'll probably get fat and develop some sort of health problem if you work more than a couple years on Wall Street.
The stress may shorten your lifespan if you don't get out before you die. You you may very well die on the job due to all the hours, stress, and pressure to succeed!
Working On Wall Street Isn't So Bad
Dueto the financial crisis, outrageous Hollywood movies featuring crooks from bucket shops (no qualified personworks atStratton Oakmont), and folks with eye popping salaries, there will probably always be a stigma attached toworking on Wall Street.
When people are losing money, it's easy to blame the finance industry. But despite the poor perception, I'd gladly do it all over again for all the reasons above and more.
Providing capital is essential to a healthy functioning global economy. Companies are often created through fund raising. Markets work due to the liquidity Wall Street firms provide.
Thanks to the innovation of ETFs and index funds, retail investors can now buy a plethora of low cost securities for a better retirement. A digital wealth advisor like Empower is my pick for a low cost way to build a risk-appropriate investment portfolio.
Leveraging Experience And Knowledge
If it wasn't for 13 years on Wall Street, Financial Samurai wouldn't havebeen born. As a reader of this site, you're the beneficiary of all the things I've learned about finance in order to achieve financial freedom sooner.
If I had some 9-to-5 job, I'd probably quit writing after a couple years in because it is damn hard to continue writing 2,000+ word articles 3-4X a week for 10+ years. But Wall Street conditioned me to keep on going like a juggernaut.
If you're able to get an offer to work on The Street, take it. If you can get a front line job where you're responsible for bringing in the revenue, even better.
Addendum: If you're going to join Wall Street, you might as well get a front office job in sales, trading, or corporate finance. That's where the big bucks can be made. Joining a Wall Street firm to do operations, tech, HR etc won't get you paid, and you'll get all the grief that goes along with working in finance as well. Do finance at a finance firm. Do tech at a tech firm.
Also, there's a lot of news about junior Wall Street analysts suffering a lot nowadays. That's not something new. Working 100-hour weeks your first two years is a right of passage. Once you get through the initial 2-3 years, life gets better and you make a lot more money.
Insights From An Ex-Managing Director On Wall Street
For more on the inside scoop on whether to work on Wall Street or not, listen to the interview I conducted with ex-Goldman Sachs Managing Director, Jamie Fiore Higgins.
Jamie worked at Goldman for 18 years and made Managing Director on the securities lending desk. She then left four years later and wrote a scintillating book entitled, Bully Markets: My Story Of Money And Misogyny At Goldman Sachs. I highly recommend picking it up, especially if you are a woman interested in working on Wall Street.
Listen to the podcast onAppleorSpotify. If you enjoyed the episode, I'd appreciate a review and a share!
Diversify Into Real Estate
When I worked on Wall Street, my income and career were completely tied to the stock market. The more the stock market went up, the better the chance I had of getting paid and promoted and vice versa.
However, during my Wall Street career, I experienced the dotcom collapse in 2000 and the global financial crisis in 2008-2009. After the 2000 dot bomb, I decided to consistently invest the majority of my savings and bonuses into real estate for diversification. Unlike stocks or a Wall Street career, real estate had much more staying power.
If you're interested in a hands off approach to real estate investing, consider investingreal estate crowdfunding. My favorite two real estate crowdfunding platforms are:
Fundrise: A way for accredited and non-accredited investors to diversify into real estate through private eFunds. Fundrise has been around since 2012 and manages over $3.5 billion in assets. Fundrise predominantly invests in residential properties in the Sunbelt, where valuations are lower and rental yields are higher.
CrowdStreet: A way for accredited investors to invest in individual real estate opportunities mostly in 18-hour cities. 18-hour cities are secondary cities with lower valuations and potentially higher growth due to job growth and demographic trends. You can build your own select real estate portfolio with CrowdStreet.
Both platforms are free to sign up and explore.I've personally invested $954,000 in real estate crowdfunding so far in the heartland of America.
Wealth-Building Recommendation
In order to optimize your finances, you've first got to track your finances. I recommend signing up for Empower's free financial tools so you can track your net worth, analyze your investment portfolios for excessive fees, and run your financials through their fantastic Retirement Planning Calculator.
Those who are on top of their finances build much greater wealth longer term than those who don't. I've used Empower since 2012. It's the best free financial app out there to manage your money.
